applied management for fidic contracts part 2: segregation ...€¦ · pm world journal applied...
TRANSCRIPT
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 1 of 13
Applied Management for FIDIC Contracts
Part 2: Segregation of the Contract Parties Involvement
Dr. Moustafa Abu Dief, CFCC™
Contracts and Claims Consultant, Gesbou Italconsult
Ahmed M. Ismail
Cyprus International University
Abstract
The FIDIC forms of contracts are widely used within the construction projects where it proved
significant attainment in Europe and the Middle East. The contract parties are always trying to
get into a contract that satisfies the specific contract requirement; hence they choose a form of
the FIDIC forms of contract those suites the project, such as the RED Book for construction,
Yellow Book for the Plant and design build, and the Silver Book for turnkey projects. Managing
the contract in an expert level shall grant successful contract deliverable, subsequently achieving
the project objectives within the project constrains. The contract parties duties, roles,
obligations, and responsibilities are defined in the FIDIC forms of contract, where it can be
considered an action plan to move through the contract scope of work within predefined route
and specific stipulated efforts that save the contract parties rights and constitutes the parties
obligations, which were segregated in this paper and reviewed for proper implementation with
the relevant recommendation based on lessons learned from previous projects and resolved
construction claims.
Keywords: FIDIC- Contracts- Employer- Contractor- Engineer - Best Practice
1. Introduction
The FIDIC different form of contract include separate clauses and sub-clauses that demonstrate
the contract parties involvement through the entire contract lifecycle, starting from pre contract
phase, moving through the contract sign, contract implementation, and post contract period. The
contract parties’ roles, duties, and responsibilities imply constitutes a package of performance
requirements which are required to ensure smooth and successful contract deliverables. It is
worthy if not mandatory to assign competent resources in the contract management domain and
it was proved through the historical records that the investment in the cost of the resources
provides significant benefits to the project. The benefits include, ensuring achieving the project
constraints, avoiding time prolongation, project conflicts, cost overrun, and construction claims.
In this paper the involvement of the project parties are reviewed, commented, and
recommendation for prudent practical implementation were provided. The paper is providing the
analysis of the practical mechanism to manage the FIDIC contract stipulated clauses for the
different contract parties, i.e. the Employer, the Contractor, in addition to the Engineer who has
a separate service agreement with the Employer considering the Red Book 1999.
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 2 of 13
2. FIDIC forms general conditions
The main part of the FIDIC forms of contract is the general conditions that include 20 clauses
divided into 163 sub clauses and sub-paragraphs. The first clause includes the general provisions
which were discussed in the part 1 of this applied management for FIDIC contracts series. The
core topic of this paper is the contract parties’ clauses, no. 2, 3, and clause no. 4 which will be
discussed in the following sections.
3. The Employer
The first party of the construction contract is the Employer, who assigns an Engineer to
supervise the contract work and represent him in the project processes. Clause no 2 of the FIDIC
general conditions is for the Employer’s role, responsibilities, and obligations as follows:
3.1 Right of Access to the Site
The project site is a property or should be under the possession of the Employer1 and it is his
responsibility to give the Contractor right of access to and to enable the contractor to possess
and work in the site entirely as stated in the contract documents, probably in the appendix to
tender. The site access can be partially and possession of the area can be in consequential
phases, pursuant the mutual agreement and as stated in the appendix to tender. The contractor
shall submit performance security before the site access which is not only to possess the project
area but it can be also agreed in the contract to enable the contractor to use a building, land,
structure as in the phases renovation project in a multistory building, the parties may plan to
work in some specific floors in every separate phase.
The required tome to give the contractor access to the site is either to be stated in the appendix to
tender or to be as per the requirement in the project programme submitted by the contractor and
approved by the Engineer as per sub-clause 8.3( programme).
Recommendations and best practice
Caution is required by the Employer is necessary to ensure full compliance with the contract to
enable site access otherwise the Contractor shall be entitled to claim any extension of time and
delay damages with reasonable profit under sub-clause 20.1, should the Employer fails to
provide the site to the contractor. In case the Employer's failure was due to any error or failure
by the Contractor, the Contractor shall not be entitled to any time or cost reimbursement.
3.2 Permits, Licenses or Approvals
The contract parties shall agree for the responsibility of obtaining the required permits, licenses,
approvals. Generally the Employer shall provide all the support and assistance deemed
reasonable to the Contractor in the following necessary documents:
1 International Federation of Consulting Engineers “FIDIC” Conditions of Contract for Construction for building
and engineering works designed by the employer, general conditions, First Edition 1 999 ISBN 2-88432-022-91999
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 3 of 13
a) Obtaining copies of the relevant Laws of the Country but are not readily available.
b) Provide the required documents and delegations to the Contractor's for the applications
for any permits, licenses, and or approvals necessary for the work including all
governmental departments.
3.3 Employer's Personnel
The communication, work interference, and coordination between different parties lie under the
Employer’s responsibility. He is responsible for confirming that his personnel and any other
contractors on the site co-operate with the Contractor's in as necessary to execute the contract
and comply with the contract requirement for safety procedures in addition to protection of the
environment contract obligations2.
Recommendations and best practice
The assignment of the Employer’s personnel should be clear and documented in the particular
conditions to ensure effective involvement in the project work and avoid any miscommunication
that may add risk. In addition, the relationship and work interference between the main
contractor and other Employer’s assigned contractors need care and proactive management to
confirm entity compliance to the predefined obligations and to avoid undefined defaults or
concurrent delays.
3.4 Employer's Financial Arrangements
As a procedural management and for transparency, the FIDIC obliges the Employer to provide
the evidence that he has carried out the financial arrangement necessary to pay for any submitted
Contractor’s request for payment in order to ensure that the Employer is maintaining his
financial abilities to pay for the contract price as estimated at the time of the Contractor’s
request. The duration of the Employer’s response is barred by 28 days to provide the reasonable
evidences after receiving the contractor’s request. In case that the Employer faces material
change to his financial or he is intending to change his financial arrangement, the Employer shall
give notice to the Contractor with detailed particulars.
3.5 Employer's Claims
When the Employer is considered to be entitled to any payment from the Contractor under any
contractual obligation or in connection with the Contract and/or to if he is entitled to extend the
defects notification period, hence the Employer/ Engineer shall give notice to the Contractor as
soon as practicably after the Employer became aware of the circumstances giving rise to the
claim, the notice should include the detailed particulars of the event3. The notice for extending
the defects notification period shall be given before the expiry of the period stated in the
2 Bunni, N. (2005), the FIDIC Forms of Contract 3rd. ed. Blackwell.
3 Nguyen, L.D. (2004). A Study on Project Success Factors in Large Construction Projects in Vietnam. Journal of
Engineering, Construction and Management, Emerald, 11 (6),404-413.
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 4 of 13
appendix to tender. Every raised claim should be based on a contractual clause and shall include
proof of the claimed financial amount and/or other extension for the defects notification period
which the Employer considers himself to be entitled. After submitting the detailed particulars,
the Engineer shall proceed in the determination process as per sub-clause 3.5 of the general
conditions to evaluate the amount due that shall be paid by the Contractor to the Employer and
the Engineer also shall decide the extension (if any) of the defects notification period in
conjunction with sub-clause 11.3 (Extension of Defects Notification Period). The approved
amount by the Engineer can be deducted from any Contractor’s payments certified in a payment
certificate, or else it may be claimed against the Contractor based on sub-clause 3.5 (Employer’s
claims).
Recommendations and best practice
The Employer should serve the claim notice as soon as practicably supported with the
documented evidences and particulars, the timely notice will add confidence and credibility to
the submitted claim and it encourages the contractor to keep contemporary records that provides
the challenge may be submitted in form of defense or counter claim by the contractor. The
Engineer is requested to prepare detailed review and evidenced evaluation to support his
justified decision on the Employer’s claim in order to withstand the potential rejection and or
challenge by the Contractor.
4. The Engineer
In FIDIC Red Book 1999 the definition of the Engineer is stated under sub-clause 1.1.2.4
"Engineer” as defined as the person appointed by the Employer to act as the Engineer for the
purposes of the Contract and identified and named in the appendix to tender, or the Engineer can
be the replaced under sub-clause 3.4 (replacement of the Engineer) from time to time and
notified to the Contractor. The Engineer can be a person or an entity as stated in the appendix to
tender.
4.1 Engineer's Duties and Authority
In the Red Book 1999, Clause no. 3- sub-clause 3.1 the Engineer has a dual role; the first is the
exclusive role towards the Employer and the other role is that related to the contract parties’
rights and obligations. The Engineer is deemed to act for the Employer when performing his
obligations under the contract unless otherwise explicitly mentioned in the general conditions,
such as in sub-clause 3.5 (determinations) where the Engineer is obliged to give a fair decision
for the matter before hand submitted by either of the contract parties. Another critical situation is
apparent with the sub-clause 2.5 (Employer’s claim) where the Engineer may be preparing the
claim for the Employer and further he has the obligation to fairy carry out the determination
under sub-clause 3.5.
For the contractual responsibilities and obligations, the Engineer has no authority to change any
obligations, duties, and responsibilities imposed on either party. For example in the cases when
the Engineer is performing his role in approval, check, certificate, consent, Examination,
inspection, instruction, notice, proposal, request, whether the act is acceptance, rejection, or
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 5 of 13
advice that shall nor relive the Contractor from any contractual responsibility stated in any of the
contract documents.
Recommendations and best practice
The responsibilities implied on the Contractor do not decrease or are limited by the Engineer’s
action, because the Engineer’s approval will note transfer the contractual responsibly from the
Contractor to the Engineer including responsibility for errors, omissions, discrepancies, and non-
compliances. In this context, many claims may arise that the Contractor submitted a material for
approval with the supporting data and the Engineer approved the submission without any
comment or restriction. The Contractor must carry out his technical duty in professional manner
to ensure complete compliance with the contractual requirements, while the Engineer should act
his role through providing the competent resources to ensure proper review, study, and decision.
The Engineer still may be questioned for negligence or defaults under the professional
responsibility and the applicable law, although his decisions do not relief the Contractor from his
contractual obligations.
4.2 Delegation by the Engineer
FIDIC general conditions sub clause 3.2 included that the Engineer may assign assistance and
representatives with identified duties and written delegation the assignment shall be in written
and it can be for certain duration and may be cancelled at the Engineer’s convenience through
written notice by the Engineer which takes effect after each party receives his copy of the
written notice for assignment or cancellation. The Engineer can get the assistance for any of his
duties and obligations except for the determination as per sub-clause 3.5 (Determinations) unless
otherwise agreed by both parties. Such assistance can be managed through the assignment of a
resident engineer or inspectors working in an on call basis for testing and inspection of the work.
Each assistant role and responsibility shall be restricted by the defined scope in the written
delegation by the Engineer as the action will be considered as if it was carried out by the
Engineer himself. The assistant’s decision may be questioned by the contractor through a notice
to the Engineer who shall promptly give his decision to confirm or vary the assistant instructions
or determination. The Engineer also ds the write to reject the work, plant or material in case the
assistant’s failure to disapprove any work.
The replacement of the Engineer is managed in sub-clause 3.4 (replacement of the Engineer) and
the Employer is obliged to notify the Contractor before 42 days from the intended date of
replacement of the Engineer with all details relevant to the intended replacement Engineer,
including name, address and relevant experience. The Contractor can notify the Employer with
any objection and the supporting particulars against an Engineer whom the Employer is
intending to assign as a replacement Engineer, by then the Employer cannot assign such person
who is debated by the Contractor.
Recommendations and best practice
The Engineering firm that is awarded the contract of and Engineer role in a construction project
usually assigns a team of engineers to carry out the work as per the service agreement with the
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 6 of 13
Employer. In such contracts the competency and size of the team are the core element affects the
service agreement implementation success, as the agreement value and the identified no of
engineers necessary in each trade, whether implied or explicitly mentioned in the contract drives
the competency and experience can be tolerated by the engineering firm. It is recommended for
either the Engineer and the Employer to work together to identify the scope of the service
agreement prior any proposal submission by the Engineer to align the Employer’s need with the
proposal of the Engineer and Ensure proper technical and commercial proposal. The Employer
should be quality oriented in the selection criteria for the potential proposal submitted by
different Engineering firm because the assignment of incompetent Engineer may cause
additional, unnecessary cost on to the project. The Engineer proposal should identify enough
experienced personnel, having similar project experience, familiar with the work and contract
language, and possessing the relevant academic and professional certificates.
Pitfalls
Some of the services agreements are signed and come into effect with in appropriate cost and or
incomplete scope of work, hence the Engineer assistant assigned to the project will probably
consist of incompetent resources or even incomplete resources. This critical situation is a fertile
ground for Engineer mismanagement and potential contractor’s claims.
4.3 Instructions of the Engineer
During the contract duration, the Engineer may issue additional information, including; written
instructions, drawings, clarifications, interpretations, in order to enable the proper execution of
the works and or making good any defects provided that information is as per the contract
documents. The Contractor shall take such new or additional written information from the
Engineer under this sub-clause and shall comply with such matters that are in conjunction with
the contract, if the instructions or information constitutes a variation, this variation shall be
managed under clause 13 (variations and adjustment). When an oral instruction is issued by the
Engineer and the Contractor sends a written confirmation to the Engineer within two working
days, then the Engineer should issue a written rejection or modification within another two
working days otherwise the confirmation sent by the Contractor shall constitute the written
instruction of the Engineer.
Recommendations and best practice
The Engineer and his delegated assistants should carefully manage the site communication to
avoid unintended conflicts or discrepancy in the instructions. The Contractor’s shall comply
with the engineer’s instruction as per the contract and the oral instructions must be confirmed in
written to get the final feedback from the Engineer or his assistants in a total duration of four
working days from the time of the Engineer’s oral instruction issuance.
4.4 Determination
Sub-clause 3.5 in FIDIC Red Book 1999 implies a very critical duty to the Engineer as he is
requested to determine, evaluate, decide any submittal of payment, cost, time, damages, or any
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 7 of 13
impacts either by the Employer or submitted by the Contractor. The Engineer shall precede
pursuant this Sub-Clause 3.5 to agree or determine any matter. General the Engineer shall
review and check the matter with each party in order to agree and reach a decision. In case of
failing to reach agreement with the concerned party, the Engineer shall make a reasonable and
fair determination in accordance with the Contract relevant documents which will constitute the
Engineer’s determination and shall be part of the supporting documents to construe and justify
the determinations. The decision or determination by the Engineer shall be notified to the
contract parties who must promptly comply with unless and until revised under the clause 20 of
the FIDIC general conditions (claims, disputes, and arbitration).
Recommendations and best practice
Determination is the prime critical role of the Engineer as he is required to provide high
competency, fairness, and proficiency. Failing to provide proper determinations associated with
the supporting particulars shall generate different claims, dispute in the project, and the Engineer
may be challenged under the applicable law and the professional Entities.
5. The Contractor
The Contractor in the FIDIC forms of contract is defined in sub-clause 1.1.2.3 ··contractor"
means the person/entity named as contractor in the letter of tender and hence accepted by the
Employer. The contractor duties, role, and obligations are included in sub-clauses 4.1 to 4.24
and will be discussed and summarized in this section of the paper.
5.1 Contractor's General Obligations
Although the Red FIDIC 1999 is considered for the work designed by the Employer, the
Contractor is requested to carry out the part of design identified in the contract if any, in addition
to executing and completing the work and remedying any defects in accordance with the
contract documents and the Engineer’s instructions as per sub-clause 4.1. The Contractor is also
obligated to provide the Plant documents, personnel, goods, consumables, and all other. As a
general obligation also the Contractor shall maintain stability and safety of all site operations.
The Contractor shall provide his proposed methods of statement for the execution of the works.
The Contractor shall submit to the Engineer the "as-built'' documents, operation and
maintenance required data/manuals to operate prior to the commencement of the Tests on
Completion, such part is considered completed only the Contractor submittal of these documents
and manuals.
5.2 Performance Security
The Performance security is stipulated in the FIDIC forms to ensure serious and competent
performance by the Contractor. The Contractor shall acquire a performance security in the
amount stated in the appendix to tender within 28 days after receiving the letter of acceptance, in
the form included in the particular conditions or approved by the Employer. Some Employers
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 8 of 13
refrain from requesting the performance security and it is not included in the appendix to tender,
hence this sub-clause does not apply, and for example ARAMCO does include the performance
security in its bid documents. The performance security shall be provided in 28 days and to be
enforceable and valid until the completion of work and remedying the defects otherwise the
performance security shall be extended until the works have been completed and also the defects
should be remedied if any.
Recommendations and best practice
The performance security documentation and application is somehow complicated and have
different routes which needs inclusive awareness by the contract parties, it can be summarized in
practical application as shown in figure 1 below.
FIDIC Red Book 1999
Sub-Clause 4.2 Performance Security
No
YES
D C B A
No claim by
the
Employer
except for
Claim under PS
only IF
within 21 d work
Completed and
Performance Certificate
issued
within 21 d Performance
Certificate issued
within 28 days from LOA
Valid until work
completion
Performance security (PS) management
Contractor provide Performance security as per LOT
Maintain PS amount
Contractor fails to extend the PS / Employer may claim the full amount of the PS
Contractor fails to
pay within 42 d.
agreed amount or
determined by the
Engineer or under
SC 20.1
Within 42 days of
receiving the
relevant notice the
Contractor fails to
remedy a default
circumstances which entitle the Employer to termination under SC 15.2
Employer to return the PS
Deduct from the PS and final remaining amount to be returned to the Contractor if any
Figure 1: Performance Security Management in FIDIC Red Book
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 9 of 13
5.3 Contractor’s Involvement in FIDIC
The Contractors involvement, obligations, and contribution in the contract is described in
different sub-clause up to sub clause 4.24, for the limitation of this paper, the sub-clauses are
mentioned and briefly discussed in table 1 below.
Red FIDIC 1999
Sub-Clause
Project Characteristics Remarks
4.1 Contractor's
General Obligations
Limited design, provide plant and Contractor's
documents specified and Contractor's
personnel, goods, consumables, and necessary
requirements
Main design by the Employer,
Limited design by the
Contractor
4.2 Performance
Security
To be submitted in the form and amount in in
appendix to tender.
Claim only under specific
circumstances
4.3 Contractor's
Representative
Appointed by the Contractor and authorized to
work on his behalf under the contract. Consent
of the Engineer is required for the appointment
and for replacement. He may delegate and
must be fluent in the language
Shall be replaced if revoked or
in case of failure to act his role-
he shall receive instructions
4.4 Subcontractors The Contractor shall not subcontract the whole
of the works. Contractor is responsible for the
acts or defaults of the subcontractor; consent
by the Employer is required for subcontractors
and not for suppliers or nominated
subcontractors. The Contractor shall notify the
Engineer not less than 28 d· of the intended
date of the commencement of each
Subcontractor's work. The subcontract shall
include that the Employer may utilize Sub-
Clause 4.5 and termination as per sub-clause
15.2
Extended to the Employer after
defects notification period-
Termination clause is valid
4.5Assignment of
benefit of Subcontract
If the defects notification period is ended
before the Subcontractor's obligations end date,
these obligations may be transferred to the
Employer and the Contractor is relieved.
4.6 Co-operation The contractor shall allow the opportunity to
carry out the work for the Employer's
personnel, any other contractors employed by
the Employer, public authorities personnel, and
any employed in the execution on or near the
Site of any work not included in the contract
except for any work constitutes a variation.
These activities may constitute
a variation if the
Contractor to incur additional
cost
4.7 Setting Out The Contractor shall set out the Works in e
contract original information
Employer is responsible for
errors/ Contractor to verify
Table 1: The Contractor in FIDIC Red Book Clause 4 Summary
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 10 of 13
Red FIDIC 1999 Sub-
Clause
Project Characteristics Remarks
4.8 Safety Procedures Contractor shall comply with all applicable
safety regulation by reasonable efforts. -
Persons- material equipment- environment-
provides necessaries.
4.9 Quality Assurance The Contractor shall submit project quality
plan for approval, to demonstrate compliance
with the requirements of the Contract.
Contractor remains responsible under the
Contract.
The Engineer shall review,
audit any aspect of the
system/plan
4.10 Site Data Prior the base date, Employer shall provide the
Contractor all available relevant data on sub-
surface, hydrological conditions, and
environmental aspects. Contractor shall be
deemed to have inspected and examined the
Site.
The Employer shall continue
providing any additional data
that becomes available-
Contractor has considered
nature of the work and goods
necessary for the work, laws,
labor practice, etc.
4.11 Sufficiency of the
Accepted contract
Amount
Contractor is deemed to be satisfied to the
correctness and sufficiency of the accepted
contract amount, in accordance with 4.10
Contractor has based the
amount on the data.
Interpretations, necessary
information. Inspections, and
examinations
4.12 Unforeseeable
Physical Conditions
(UFPC)
Except for climatic conditions the UFPC
includes natural physical conditions, manmade,
hydrological conditions, obstructions, and
pollutants- If any UFPC is encountered, the
Contractor shall notify the Engineer, describing
the physical conditions, justifying why it is
considered UFPC- submit variation request as
applicable- shall not result in a net reduction in
the contract price.
Notice is to be as soon as
practicable- continue the work
with necessary measures and
Engineer’s instructions. If
Variation justified, time and
cost will be granted and the
Engineer my decide
reconciliation with easier
encountered conditions.
4.13 Rights of Way and
Facilities
Costs and charges for special and/or temporary
rights of way which he requires- shall also
obtain at his risk and cost any additional
facilities outside the Site.
4.14 Avoidance of
interference
Contractor shall not interfere unnecessarily
with the convenience of the public or access to,
use of all roads and footpaths.
Contractor shall indemnify the
Employer for any damages
Red FIDIC 1999 Sub-
Clause
Project Characteristics Remarks
4.15 Access Route The Contractor is deemed satisfied for the
availability and suitability of routes to site, The
Contractor shall provide at his cost and risk,
maintenance, protection, signs and directions,
and authorities requirements.
Employer shall not be
responsible for any claims
which may arise from the
use or otherwise of any access
route
Table 1: The Contractor in FIDIC Red Book Clause 4 Summary-continued
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 11 of 13
4.16 Transport of
Goods
All fees and efforts are the Contractor’s
responsibility. The Contractor shall notify the
Engineer 21 days prior the delivery of any
major item.
No cost or claim on the
Employer
4.17 Contractor’s
Equipment
The Contractor shall be responsible for all
Contractors’ Equipment is for the works.
Excluding vehicles for
personnel, good transporting
4.18 Protection of the
Environment
The Contractor shall take all reasonable steps
to protect the environment on/ off site
Eliminate damage and nuisance
( pollution, noise)
4.19 Electricity, water
and Gas
The Contractor is responsible for the provision
of all power. water and all services he needs
for the work
The Contractor can use services
available on the site at his cost
and risk
4.20Employer’s Equ.
and Free-Issue material
Facilities
, the Employer shall make available all
Equipment and free issue material as may be
stated in the contract- the Contractor shall
promptly notify any defects/ shortage
Contractor is responsible for the
Equipment while under his
control.
4.21 Progress Reports To be as per particular conditions, monthly
reports are to be within the first seven days of
the presented period, 1st one is at the end of 1st
calendar month.
It continues until the work
completed on the date stated in
the taking over certificate
_caution for the contents_
4.22 Security of the Site Contractor is responsible to organize the site
access for the authorized persons only
Contractor personnel, Eng.
Employer, those notified by the
Employer & Contractor.
4.23 Contractor’s
Operations on Site
The Contractor shall limit the work operations
to the Site and areas approved by the Engineer
as working areas. He shall keep Equipment and
personnel within the Site. Maintain the site free
from obstructions surplus, wreckage, rubbish,
and temporary works upon completion.
Upon issuance of taking over
certificate, the Contractor shall
leave that part/ site and the
works in a clean and
safe condition. Maintain those
necessaries for defects
notification period 4.24 Fossils The Contractor shall place under the care and
authority of the Employer, fossils. Coins, all
items of geological or archaeological interest
found on the Site. The Contractor should
refrain from removing or damaging any of the
findings.
Contractor serves a notice,
complies with the Eng.
Instructions, and submits a
claim Sub-Clause (20.1) for
time and cost if justified.
Recommendations and best practice
The Contractor’s involvement is dispersed all over the project boundaries, scope, phases, and all
processes. The accompanied responsibilities imposed by the contract shall be considered by the
Contractor starting in the bidding stage/ pre-contract stage and he needs to diligently evaluate all
elements and particulars lies under his risk and cost. In the post contract and execution stage the
Contractor has to assign competent team to manage the contract in a proactive manner to
successfully complete the project within its constraints and the target objectives.
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 12 of 13
6. Conclusion
The International Federation of Consulting Engineers “FIDIC” forms of contracts provided
separate clauses and sub-clauses to explain and demonstrate the contract parties’ involvement in
the contract management processes. The Engineer, who is assigned by the Employer, has got a
separate Sub-Clause no 3 describing his roles, duties and responsibilities. Some clauses and sub-
clauses were discussed in detail and the recommendations for diligent contract management and
implementation were provided. The pitfalls that may be experienced by the different parties
were highlighted as were recorded in past projects lessons learned. The paper recommended and
ensured assignment of competent personnel to avoid conflicts and successfully achieve the
projects objectives.
References
1. Abu Dief, M. (2017) Applied Management for FIDIC Contracts, Part One: Segregation
of General Provisions. PM World Journal, Vol. VI, Issue VII – July 2017
2. Bunni, N. (2005), the FIDIC Forms of Contract 3rd. ed. Blackwell.
3. International Federation of Consulting Engineers “FIDIC” (1999) Conditions of
Contract for Construction for building and engineering works designed by the employer,
general conditions, First Edition 1999
4. International Federation of Consulting Engineers “FIDIC” (1999) Conditions of
Contract for Plant And Design-Build Contract First Edition
5. International Federation of Consulting Engineers “FIDIC” (2000) The FIDIC Contracts
Guide First Edition
6. Nassar, G. (2001) Arabic Translation of Conditions of Contract for Construction for
building and engineering works Designed by the Employer, © Gamal Nassar, FIDIC
7. Nguyen, L.D. (2004) a Study on Project Success Factors in Large Construction Projects
in Vietnam. Journal of Engineering, Construction and Management, Emerald, 11
(6),404-413.
8. Oteifa, S. and Abu Dief, M. (2016), Application of FIDIC Contracts in Construction
Claims and Arbitration. IntJRecentSci Res. 7(9), pp. 13351-13356.
9. Seppälä, C. (2005) Contractor’s Claims Under The FIDIC Contracts For Major Works.
In: International Construction Contracts and Dispute Resolution Co-Hosted by ICC and
FIDIC In partnership with The Cairo Regional Centre for International Commercial
Arbitration. Semiramis Intercontinental Hotel, Cairo, Egypt April 9 – 10, 2005
10. Robinson, M. (2011) A Contractor’s Guide to the FIDIC Conditions of Contract 1st ed.
West Sussex, UK: John Wiley & Sons, Ltd
11. Totterdill, B. (2006) FIDIC users’ guide a practical guide to the 1999 Red and Yellow
Books 2nd
ed. London: Thomas Telford Publishing.
PM World Journal Applied Management for FIDIC Contracts, Part 2: Vol. VI, Issue IX – September 2017 Segregation of the Contract Parties Involvement www.pmworldjournal.net by Dr Moustafa Abu Dief Featured Paper and Ahmed M. Ismail
© 2017 Moustafa I. Abu Dief, Ahmed Ismail www.pmworldlibrary.net Page 13 of 13
About the Authors
Moustafa Abu Dief, PhD, CFCCTM
, MCIOB, ACIArb
Egypt- KSA
Dr. Eng. Moustafa Abu Dief. Ph.D., FICCP, CFCC™, CCP, PMP®, MCIOB,
RMP, ACIArb. Certified Forensic Claims Consultant and he is a project management professional
with over 27 years of experience in the field in Egypt and Saudi Arabia, mainly in contract and
claims domain. Moustafa is delivering training courses in FIDIC, NEC3 contracts, Forensic cost
claims and dispute resolution management. Moustafa, can be contacted at the following:
https://www.linkedin.com/in/moustafa-ismail-a-dief-ficcp-cfcc-ph-d-ccp-pmoc-pmp-
93798a16?trk=nav_responsive_tab_profile
[email protected] or [email protected]
Ahmed M. Ismail
Cyprus, Turkey
Civil Engineering Program, Cyprus International University
https://www.linkedin.com/in/ahmed-moustafa-1b69988b/
www.CIU.edu.tr